Archive for June, 2006

The Shanghai Gold Exchange which deals mainl with gold and platinum spot contracts announced that it will begin trading spot and spot deferred silver contracts within about a month.

This follows the rapidly developing silver market that is happening in China. China consumes as well as produces massive amounts of silver. Since 2000 the country has increased production by roughly 10% per year. Consumption of the metal in Jewelry and Industrial applications has increased nearly 35% over the past two decades with most of the growth coming in the latest decade.

Growth in both these areas is expected to rise.

The other exchange in Shanghai dealing with silver contracts is the White Platinum and Silver Exchange (WPSE) which deals mainly with silver contracts and speculation on silver.

Opening the Shanghai Gold Exchange to silver trading opens a whole new market reach for the precious metal silver and will allow more trades to occur on a daily basis bringing more popularity to the metal.

For more information check out the People’s Daily article on silver at Shanghai Gold Exchange.

Shares of iShares Silver Trust (SLV) rose sharply the last few days on news of a weakening dollar, and fed interest rate hikes that hope to stem off inflation.

SLV climber nearly 4 points as silver jumped nearly 30 cents a troy ounce today right in step with gold climbing to near $600 range again. The trust which opened several months ago buys silver kept in a vault and values it’s fund against the current and future prices of silver.

Silver looked to regain it’s $15 an ounce price of a month ago when shares of SLV topped $150 a share. With the Federal Reserve raising interest rates to curtail inflation more and more people are looking to investments like silver to keep their money safe from an unreadable economy. Stocks in general jumped on the news with the DOW rising more than 200 points Thursday.

Buying shares of SLV may be a bumpy ride in the short term but analysts believe that silver as well as gold will continue to rise as industrial and jewelry demands heighten over seas.

Gold is down but not out say analysts and, of course, mining presidents. The recent rally of gold that sent the price to 26 year highs has seemed to cool down in the last month dropping the price back down below $600 an ounce signaling an end to this portion of the bull market. Silver also saw record highs as it followed suit right with gold shooting above $15 an ounce before settling back in around $10, still a high price.

In a recent article found in Rocky Mountain News titled Newmont says gold rally will resume after September a prominent Gold Mining president, Pierre Lassonde said that gold will become bullish again after September. He claims recent pullbacks to the gold market came after the steadily declining dollar slowed it’s decline this last month causing investors to take their money out of gold and put it elsewhere.

The reasoning. A dollar that essentially has no where to go except weaker. To quote the article directly:

A widening U.S. deficit means more dollars need to be converted into foreign currency to pay for imports. It also indicates the dollar may need to weaken to make U.S. exports cheaper and imports more costly to close the gap.

This all makes sense and definitely plays on the fears of many investors as well as those seeing only red for the US economy. However, this is more of a doom and gloom outlook for the dollar and some say the rally for gold and silver is over and the bull market that many say will surpass $1000 and ounce gold and $50 and ounce silver, we’ll wait on see.

Precious metals retreated over the last 24 hours amid worries of a falling dollar, speculation that the fed will most certainly raise interest rates, and shaky news from the middle east.

Even though the dollar is lowering the feds news that interest rates are going to be rising again put a stop to any short lived rebound that was seen in both Gold and Silver as of this week. The rising interest rates are in hopes to curb inflation that has been running rampid over the past few quarters.

The Fed’s news also comes at a time when global central banks are said to also be looking into raising key interest rates to reduce inflation and also the skyrocketing commodities prices that the world has seen over the last half year. This would mean lower prices for commodities and hurt some of the newer funds that started this year to cash in on the precious metals climb. Most notably, iShares Silver Trust (SLV:AMEX) and StreetTracks Gold Trust (GLD:NYSE) which lost 2.43 and 0.60 respectively in the days trading.

Other notables being hit today on the uncertain economic outlook and threats of interest rate hikes was Market Vectors Gold miners ETF (GDX: AMEX) and Glamis Gold Ltd (GLG:NYSE). GLG however was big news Wednesday when it announced it was doubling gold reserves and the price jumped from 31 to 34 in early morning trading.

Other news to watch out for as the precious metals market continues to rock back and forth is the possible nuclear missile testing being done by North Korea and the continued enriching of uranium by Iran. Both of these tense topics may keep precious metals at the highs we are seeing and if even a few of the worlds banks decide to forgo any interest rate hikes silver and gold could come charging back towards the end of the year.

Is silver making a move back up the ladder it jumped off of late last month?

The dollar lowered, the stock market is rebounding, and Iran is still enriching uranium. Aside from the stock market rebounding the other two indicators, although might be downers for some, for precious metals like silver they’re great indicators for a possible boost in silver and gold prices.

Precious metals tend to follow the value of the dollar and troubled times. As the dollar goes down people want to put their money in a safer place such as metals that have always held value as a medium of exchange. Also in troubled times people want safety and safety is found in precious metals like silver.

Three days straight both gold and silver have edged further ahead and look to have started off London trading ahead of yesterday.

Silver can now be bought via the iShares Electronic Traded Fund, SLV. If you don’t want to have silver bullion bars laying around your house or office or safe then SLV might be for you. The fund is traded on the American Stock Exchange and can be bought through most brokers, online or otherwise.

I recently read through the SLV Prospectus, which was very informative about the whole silver industry and suggested to anyone wanting to know more about the world of silver. The iShares trust/fund consists of all bullion silvers bars held in a vault. The fund is valued based on what comes out to be approximately 10 troy ounces minus the fees to shareholders.

The prospectus is contains charts and graphs, supply and demand charts, and even more. Give it a read if your interested in what’s going with silver.

Have you been thinking about buying silver? Now may be the perfect time. Although silver has been put down lately due to a 100% increase in price in the last year (overpriced or finally catching up) silver may still be a good buy after being pummeled this last month back down to only a 50% year gain of $10 per troy ounce of silver.

For those of you who read finance books you may have read or been suggested to read Rich Dad, Poor Dad by Robert Kiyosaki. A great book and if you are looking for a different frame of mind when it comes to investing I suggest checking out what he and his co-author have to say in their best selling book.

If you have and are looking for more words of wisdom from Robert than you might want to check out his column at Yahoo Finance. He writes a good article over there every couple of weeks and in May posted something about silver and what he thought of the potential to buy even though silver and gold have skyrocketed since the first of the year.

His article titled Five Factors Favoring Silver discusses why Warren Buffets famed advice of “Walk away when everyone else is buying” might not apply yet to silver. He lists five factors he feels that make silver a good buy and why investors should think about adding some silver to their portfolios. These factors are:

1. Silver is Consumable meaning that it has uses in industry other than just ornamental.
2. It’s a precious metal used in money, real exchange.
3. The dollar is becoming more and more worthless.
4. Equities tend to move opposite of commodities, stocks are going down, commodities should go up
5. Silver can now be traded through a paper asset, the exchange traded fund SLV

These are of course just a few reasons why silver may be a good buy but silver no doubt will continued to be watched by many of the worlds top investors and we will follow as close as possible to bring you up to date news on who’s buying what.

There are several ways you can buy silver. You can physically buy the precious metal and store it or you can buy the right to the metal and have something sort of like a stock certificate.

It used to be the every single dollar bill was backed by gold until that was done away with. Every person had the “rights” to gold with every dollar they had. Now, you need to get your rights to gold (and silver) somewhere else.

One of the easiest ways to get into the precious metal silver is to buy silver jewelry. It may sound a little foolish but if you can find certified pure silver jewelry then you are buying pure silver in one form or another. It doesn’t matter if it’s shaped into a unicorn, silver is silver and anyone looking to buy silver will know it’s true value.

With that being said the other easy way to purchase silver is through newly started Exchange Traded Funds like iShares Silver Trust Fund (SLV). Exchange Traded Funds or ETFs are traded just like stocks and the fund is backed by silver and the priced fluctuates with the silver market, demand supply etc etc. There is another fund like this for gold that you could get into but we’re here to talk about silver.

Another way to get into silver is to buy silver bullion. Silver bullion usually comes in bars or rounds and is really only a good buy if its 0.999 pure silver, meaning 99.9% pure silver. Bars, be it 1 oz, 10 oz, or 100 oz bars are easily stackable and can be stored easily in a safe deposit box, a home safe, or somewhere safe like buried in your backyard (not suggested).

Silver Bullion can be purchased through online stores like http://www.nwtmintbullion.com>Northwest Territorial Mint, Aloha Bullion, or eBay.

One more way you can buy silver is to go through a silver broker, where your money is now backed by silver or another precious metal. Again you don’t really own a chunk of silver but you have the right to the silver for what your dollar is worth and we all know that the dollar can fluctuate and cause you to own very little silver depending on the day.

When you look to buy silver, be it online or from your local pawn shop be creative. Search around for a good deal. Sometimes your purchasing method is the limiting factor or maybe its your locale. Whatever it be we hope you get your hands on some quality silver.

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Silver followed the markets of the world as it and other precious metals rebounded from near 3 month lows in early trading.

Silver spot prices bounced back above $10 an ounce and gold gained $13 after suffering its biggest loss of the year. This is coming after the dollar shows signs of getting weaker and tension in the middle east heats up. Stocks are rebounding as well after multiple losing weeks.

Is it time to buy silver? What’s the downside risk? What’s the upside potential?

Gold and more importantly silver have been hit hard over the past few weeks, no doubt from profit taking off the last huge climb that precious metals saw. But now that silver is retreating back to previous years levels (around $7 spot price) is it time to buy?

Demand on silver is still strong but with the recent climb in silver prices mines and mints have begun turning out more and more to meet such demand. But will the demand keep rising. From everything we can see in China, the answer is yes. Chemicals, jewelry, computer parts, ornaments; all of these things are consumer goods that people buy when the economy produces money for them to buy them with. Well their economy is producing money. Too much in fact.

With silver spot prices dropping below $10 and ounce we think you should begin looking into the possibilty of adding a little shininess to your portfolio. The downside risk seems to be leveling off and diminishing. We don’t forsee silver prices dropping much below the previous highs of $7 and the world has already this year seen prices jump above $15. In the next economic hard times look for silver to surpass this years highs and top out above $20 an ounce!